James Murdoch 'was told of phone-hacking email'

Phone hacking: the News of the World's former legal manager has claimed he told James Murdoch about an email suggesting hacking extended beyond one rogue reporter. Photograph: Warren Allott/AFP/Getty Images

James Murdoch knew about an explosive email that would have proved that phone hacking at the News of the World was not confined to "one rogue reporter", MPs have been told.

The former legal manager at the now-defunct tabloid, Tom Crone, openly contradicted evidence given by Murdoch to a parliamentary committee in July by telling the same committee today that he was "certain" he told the News International chief of the existence of this email during a meeting in 2008.

According to Crone, the meeting lasted 15 minutes and was also attended by the then News of the World editor, Colin Myler, who concurred with the former legal affairs manager's versions of events.

Murdoch immediately dismissed Crone's claims in a robust statement.

He said he stood by his original testimony to the select committee and had not been aware that phone hacking extended beyond the former royal editor Clive Goodman and the private investigator Glenn Mulcaire, both of whom had been convicted and jailed in relation to phone-hacking charges more than a year earlier.

He added: "As I said in my testimony, there was nothing discussed in the meeting that led me to believe that a further investigation was necessary."

The continuing war of words between Murdoch and his two former executives almost certainly means he will be recalled to appear before the committee for a more forensic scrutiny of his original evidence.

The culture, media and sport committee was today taking evidence from Crone and Myler and two other former News International executives as part of its investigation into allegations of "cover-up" of the scale of phone hacking at the Sunday paper.

Crone said it was made clear to Murdoch during the 15-minute meeting what the email "was about" and "what it meant".

He said the email was documentary evidence that at least one other reporter was aware of phone hacking and that this was why they needed to settle out of court with the former Professional Footballers' Association boss Gordon Taylor, who had taken civil action against the publisher in relation to the alleged interception of his voicemails by the paper.

The email only emerged during the process of discovery by Taylor's lawyers. "Up to then there was no evidence that News of the World were implicated. The first I saw of that was that was the 'for Neville' email which reached us in spring 2008. We went to see Mr Murdoch and it was explained to him what this document was and what it meant," said Crone.

It was at that meeting that Murdoch authorised Crone to reach a settlement with Taylor, who was eventually paid £425,000, the committee heard.

Crone also insisted that there was no "cover-up" by the company, as the email had been provided to them by the Metropolitan police after it was seized from private investigator Glenn Mulcaire, who was jailed with Goodman in 2007 for hacking into the phone messages of members of the royal household.

A confidentiality clause included in the settlement was insisted upon by Taylor's lawyers to avoid sensitive information about his personal life becoming public, said Crone.

He said the size of the payout to Taylor was "good legal management" designed to avert further litigation from other public figures who had been named in Glenn Mulcaire's court case and was not about buying his silence.

In a bruising clash with committee member Tom Watson – the Labour MP who has led the charge over phone hacking – Crone denied that Murdoch demanded a confidentiality clause and authorised the large financial settlement in order to prevent the exposure of "widespread criminality" at the News of the World.

The former legal manager said his priority was to avoid cases being launched by four other individuals whose phones Mulcaire had admitted hacking.

"The imperative or the priority at the time was to settle this case, get rid of it, contain the situation as far as four other litigants were concerned and get on with our business," said Crone.

Crone also said that the former editor of the paper, Andy Coulson, was keen to keep Goodman employed even if he was convicted and jailed for phone-hacking offences.

And MPs were told that Goodman received a payout of about £240,000 despite being found guilty and being jailed for the offences in 2007 because of a "sense of family" towards staffat News International.

The former head of legal affairs at News International, Jon Chapman, said the former chief executive of the company, Les Hinton, had "wanted to do it on compassionate grounds because of the Goodman family".

Chapman separately admitted that Rupert Murdoch had got it wrong when he said legal firm Harbottle & Lewis had made a "major mistake" when it did not report any evidence of illegal activities at the News of the World. However, he defended his former paymaster by saying he had not been properly briefed on Harbottle & Lewis's review of internal emails.

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